Complexity of United States tax code (1 Viewer)

[ChipperT]

You guys are also missing another point...the majority of growth in t his country comes from the wealthy people and their decisions to participate in that growth.

What is POOR? IMO, all of these combined:

• lazy people
• unfortunate people
• people that absolutely cannot grow an economy, even they tried
• people with a lack of brain power to help themselves
• people who hide money when they actually have it

with all of those types of people combined, being poor is obviously overwhelming.

...

the_net, methinks you suffer from a severe case of MAS (Marie Antoinette Syndrome). "What? The poor have no food? Let them eat cake!" Be careful that the cure is not the same as hers! There are many reasons for being "poor" and the reasons you claim is certainly among them, but in reality if a very minor subset of those who live in poverty.

 

[the_net_2.0]

what the heck are you talking about, Chipper?

If anything, you should be able to infer from that little post of mine that I'm quite ticked off about rising taxes in this pathetic country of ours, seeing that I am of the age to start a family of my own, but it seems more and more like that's fading away as time goes on.

 

[Kryst51]

what the heck are you talking about, Chipper?

If anything, you should be able to infer from that little post of mine that I'm quite ticked off about rising taxes in this pathetic country of ours, seeing that I am of the age to start a family of my own, but it seems more and more like that's fading away as time goes on.

You shouldn't let our tax system keep you from having a family.... People who decide to have children make it work, regardless of the tax situation (I don't mean by using welfare, which some people do need).

 

[ChipperT]

what the heck are you talking about, Chipper?

If anything, you should be able to infer from that little post of mine that I'm quite ticked off about rising taxes in this pathetic country of ours, seeing that I am of the age to start a family of my own, but it seems more and more like that's fading away as time goes on.

What I inferred from your post was that you look down on those who are poor, who are disadvantaged and have less than you do and that you look with admiring eyes on the wealthy. That you have no desire to help those who are poor but rather, you offer full support to the wealthy to keep them that way and help them amass more and more wealth.

If that is not a severe case of MAS then I don't know what is.

 

[the_net_2.0]

If that is not a severe case of MAS then I don't know what is.

That is exactly what it looks like, yes. And right there, you have the primary difference between a democrat's argument and republican's argument.

What I clearly believe is that people will do what you do, since 99% of them are always hungry for leadership and never will be a leader on their own. Thus, you force them to work and SHOW them how to do it, in order to provide for themselves, they'll do it. Give them everything for free and pity them to death, and you'll find yourself doing it for many more lifetimes to come.

Human being are creatures of habit. Make examples out of the right kind of habits, not the wrong ones.

Clearly, the biggest problem with each side of congress is the fact that both parties take their view to such extremes, both of them confuse the heck out of people. And then you get the alternative output...people give up and they don't care what happens, which is what we see now.

But on the flip side, fortunately for people like you and me that want to keep fighting for the right thing, people will always be extremely ignorant, so they will always listen to someone new, regardless of the past.

And NO, what you say is completely inaccurate Chipper. I'm not wealthy, nor do I care about it. But if a financial issue cause me to one day decide between keeping my life's essentials like house, car, etc... and giving my normal annual contribution to the poorest charity fund on earth, YES I would keep the things for myself. It is not my responsibility to compensate for issues in this world that should be compensated for by the government.

 

[AnthonyGerrard]

I always wondered why we couldn't have just one tax.

VAT or goods and services tax as they call it in Oz.

Allow governments to tweak the levels but not the fundamental concept..

Tax the rich by raising the level on posh goods
No tax on widescale necessities.

How much you pay in tax will therefore be a measure of your profligacy and efficiency?

Sounds simple to me.

While I'm at it
No private education
Meritocratic higher education for all although maybe limited in places according to job demand. ( you can't pay everyone to be a lawyer )
No denominational schooling
And get rid of catchment areas for school instead ranking should be 1st sibling 2nd distance to school.

My conclusion - people just want to be treated fairly and equitably.

Yep - I could take my wage spend as little as possible here, then spend it in my real home in the Isle of Man or somewhere at a far less VAT rate. Thereby penalising those who contribute the the economy by circulating money here, whislt us offshore, tax exiles take the money tax free, and remove it from the country?

 

[AnthonyGerrard]

The other form of taxation is the "transference of wealth". That is taxing a certain segment of the population and giving the collected money to the "disadvantaged" target group. As our budget deficit grows and grows, we can't keep giving money away that we don't even have. We can't afford to have everybody collecting unemployment. And as you point out our elected officials do not seem to understand this. To make matters worse, Obama's State of the Union Address perpetuates the use of taxation accounting gimmicks under the guise of "investment". (Transferring wealth from the taxpayers to businesses under the pretense of economic stimulus.)

So you dont want the government to invest in business creation , nor in unemployment benefits?

What do you want? Loads of self employed, subsistance farmers in New York, Detriot and Chicago?

 

[Steve R.]

So you dont want the government to invest in business creation , nor in unemployment benefits?

What do you want? Loads of self employed, subsistance farmers in New York, Detriot and Chicago?

Unemployment for a short period of time, acceptable, not a problem.

In a free-market system, it is up to the people themselves, to create businesses based on consumer demand. Businesses would only be created and succeed based on its economic viability. Would your concept of government "investment" in business be equivalent to implementing a Soviet style planned economy?

The government actually does "invest" a lot in business for which it gets virtually little credit. The infrastructure such as schools, roads, sewer, water, garbage collection and even industrial parks. Through the school system, the government provides the private sector with an educated work force. Add police protection too, as another government "investment".

The downside of many government programs for "investing" in business creation is that they are form of subsidy that distorts the market. Why should XYZ corporation get a low interest loan from the government so that XYZ can sell a product at lower cost then the ABC corporation that happens to make the same product? What is even worse is that some governments give a tax break for a company to relocate to their municipality. When the tax break ends, the company receiving the tax break simply close the plant and moves-on. The local community loses twice. First through increased local taxes to pay for the corporate tax break. Then - when the company moves out - unemployment.

 

[AnthonyGerrard]

Unemployment for a short period of time, acceptable, not a problem.

In a free-market system, it is up to the people themselves, to create businesses based on consumer demand. Businesses would only be created and succeed based on its economic viability. Would your concept of government "investment" in business be equivalent to implementing a Soviet style planned economy?

The government actually does "invest" a lot in business for which it gets virtually little credit. The infrastructure such as schools, roads, sewer, water, garbage collection and even industrial parks. Through the school system, the government provides the private sector with an educated work force. Add police protection too, as another government "investment".

The downside of many government programs for "investing" in business creation is that they are form of subsidy that distorts the market. Why should XYZ corporation get a low interest loan from the government so that XYZ can sell a product at lower cost then the ABC corporation that happens to make the same product? What is even worse is that some governments give a tax break for a company to relocate to their municipality. When the tax break ends, the company receiving the tax break simply close the plant and moves-on. The local community loses twice. First through increased local taxes to pay for the corporate tax break. Then - when the company moves out - unemployment.

But the free market system doesn't work does it. It needs serious regulation - to stop the banks doing again what they have already done. Its equally true - in all other kinds of monopoly situations too.

Unless the governments invested in banks, there was no money going round, for companies, let alone start ups - which would have ensured high unemployment for quite a while.

I presume you agree with that?

How long is unemplymet acceptable to you for a hand to mouth manual labourer say? You're happy to pay benefits for this long?

If your government doesn';t give companies subsidies, tax breaks , incentives - someone else will.

 

[Mike375]

But the free market system doesn't work does it. It needs serious regulation - to stop the banks doing again what they have already done.

Everything should be gov't owned and that would mean "marketing/selling" is removed.

Cars could be made in just a couple of sizes and one colour. Currently there is a massive amount of labour wasted on design of cars with "selling/marketing" being the driving force.

When all is gov't owned there is no need for banks and insurance companies. Those two entities use a huge amount of labour/skills dreaming up "products" and then selling those products to round up and centralise money.

The list is endless.

When all is gov't owned then "want" will be replaced by "need". A huge proportion of the work force is tied up in activities that could be removed if all was gov't owned.

 

[the_net_2.0]

Loads of self employed, subsistance farmers in New York, Detriot and Chicago?

hmmm...interesting concept. I don't the subsidizing program would work in this scenario...

 

[AnthonyGerrard]

hmmm...interesting concept. I don't the subsidizing program would work in this scenario...

Neither do I , but if theres no subsidies , or help to do anything else I wondered what Steve Imagined.!

But I think he imagined unemployment - thats OK by Steve - for a while at least.

 

[Adam Caramon]

One reason for why the US tax code is insanely complex is the perpetual quixotic quest for "fairness". Fairness, is an elusive motherhood goal that can never be achieved. What is fair for one person may not fair to another person.

Which is why we get to vote every few years to determine who's definition of fairness we want at the time.

The other form of taxation is the "transference of wealth". That is taxing a certain segment of the population and giving the collected money to the "disadvantaged" target group. As our budget deficit grows and grows, we can't keep giving money away that we don't even have.

As Chipper pointed out, this is not accurate. If we tax the wealthy and then give the money to the poor, that would be transference of wealth. If we simply give more to the poor and increase the national debt, then it really isn't transference. But I agree, we cannot give money away that we don't have (we need to take it from someone else first).

Countries like China, may come to the same conclusion and stop buying our debt. Then, in theory, at some point, taxes will have to be raised to cover our debt burden.

Or America will have to declare bankruptcy, and not pay back the debt (or pay a portion).

What is POOR? IMO, all of these combined:

Poor to me means someone who is barely surviving. I have friends who joke around that they are poor, but they can afford to cover their mortgage, their car, and their basic needs. They can't afford massive health care bills or the cost of college education for themselves or their children.

On lazy people, I think most people would agree, and thus there would be bipartisan support, that they need to go get a job. The problem is that the number of lazy people is actually quite small. The Republicans would like you to believe that everyone who is not rich is just not working hard enough, which is not reality.

I personally think that if you are on unemployment, you should be required to spend 10 hours/week in community service. This mass influx of people to the system would help us clean up parks, perhaps mentor children, etc. This would help the community as well as the individuals to go out and speak with others, perhaps opening job opportunities to them.

The people who are truly lazy would not show up for their community service, and then would be cut off from the benefits. I know Republicans would support this, and I think Democrats would if it was presented right. Maybe even make it only kick in after x number of weeks of unemployment, which would give people a reasonable amount of time to acquire a job before they have to start doing community service.

In a free-market system, it is up to the people themselves, to create businesses based on consumer demand. Businesses would only be created and succeed based on its economic viability. Would your concept of government "investment" in business be equivalent to implementing a Soviet style planned economy?

In a true free-market system, it is survival of the fittest. Great system if you're wealthy, not so great if you're poor. USA has not been a true free-market system for a very long time. The fact that you throw out terms like "Soviet style planned economy" shows that you're relying too much emotion (in this case, fear) in order to try to get your point across. Which shows a weakness in your argument. If it can't stand logically on its own, there's a reason why.

 

[the_net_2.0]

Neither do I , but if theres no subsidies , or help to do anything else I wondered what Steve Imagined.!

But I think he imagined unemployment - thats OK by Steve - for a while at least.

I don't think the joke took hold here.

 

[Steve R.]

As Chipper pointed out, this is not accurate. If we tax the wealthy and then give the money to the poor, that would be transference of wealth. If we simply give more to the poor and increase the national debt, then it really isn't transference. But I agree, we cannot give money away that we don't have (we need to take it from someone else first.

It is a transference of wealth separated by time.There are two basic scenarios.

First scenario, the government issues a "welfare" check, to use a politically charged word. Since the government does not actually have the money to issue the check, it borrows the money through the use of an IOU (bonds and treasuries). The IOUs are then paid off (at a later date) through wealth (revenues) obtained from future taxation.

Second scenario, the government issues a "welfare" check based on printed money backed by "hot air". This results in inflation. What inflation does is transfer future wealth that has yet to be created by our children to the current generation. Based on the Bureau of Labor Statistic's Inflation Calculator it now takes $736.68 (2010 dollars) to have the same purchasing power as $100 did back in 1960. Wikipedia CPI graph)

Just found this sound byte: Inflation the Silent Tax.

USA has not been a true free-market system for a very long time.

No argument from me on that. The current economic system, which is one reason for the insane complexity of our tax system, is Corporatism. A government by, of, and for the corporations. I'm not going to go for a long involved response. If you wish to further examine my position, look here.

 

[Insane_ai]

I support a flat tax. Tax at the same rate for every dollar earned regardless of how may you earn. When everyone has to pay a fair share of the burden, the class warfare waged by our current tax system will die down to a low roar and incentive to produce more will go up.

 

[the_net_2.0]

I support a flat tax. Tax at the same rate for every dollar earned regardless of how may you earn. When everyone has to pay a fair share of the burden, the class warfare waged by our current tax system will die down to a low roar and incentive to produce more will go up.

that's right. and with that, the standard of living will plummet.

 

[Thales750]

I support a flat tax. Tax at the same rate for every dollar earned regardless of how may you earn. When everyone has to pay a fair share of the burden, the class warfare waged by our current tax system will die down to a low roar and incentive to produce more will go up.

Where did you learn that?

In this brief we will attempt to gain an understanding of how myths are defining our national dialog. Conservative politicians and more importantly conservative radio and TV are brain washing the American people by using simple micro economics to define the message. In addition to this simplified message they are also playing on the emotion that people that work in menial jobs are some how inferior and are living off the hard work of the middle class.

Neither of these assertions is accurate, and both serve to perpetuate the massive concentration of wealth.
First a little historical fact.

During the time of American economic preeminence the highest marginal tax rate was 90%. Now of course no one paid that much because investment deductions and tax credits kept the highest concentration of wealth paying a lower effective rate.

However, during that time period the US was the world leader in job creation. We had a virtual 0% unemployment for 4 decades. In economics full employment is calculated to be approximately 4% unemployment.

Myth Number one: A flat tax would have everyone paying their share of the burden. On the surface this might seem logical. It doesn’t take into consideration the economic consequences. This assertion is based on the emotional response; that "lesser people are getting the benefits, when I have to work my entire life to support those bums".

The reality is much graver, As was stated earlier in this thread, some taxes have the power to reengineer society and in fact it is the most important power the Federal Government has to shape the countries future. Some people think that by engineering the economy, the Government is redistribution wealth and in some cases they are correct. However, and here is the most important point of this myth.

When the highest concentrations of wealth pay such a low amount it removes the incentive to invest. If a corporation will pay 90 percent tax on net before-tax earnings, they will have more incentive to increase their investments. If they are only going to pay 15 or 20% they are given incentive by the country to reduce investment.

The very fact that “class warfare” was brought up proves that this propaganda is targeted at an emotional response from people that believe they are better than a regular worker and that they are going to become one of the ultra rich.

Brain washing of this nature is why; the rich are getting richer at the expense of the people. As you know we have not entertained this tax code except in really far right circles.

The far right are destroying the middle class, we will need to educate the masses on this process so we can elect people that will fight against the tide.

In my next installment I will attempt to explain other factors that are being ignored or spun by our national conversation.

Other myths that need to be exposed are:
1. A gold standard would stabilize the economy.
2. Regulations cause jobs to move overseas.
3. Low taxes stimulate growth (similar to the flat tax argument)
4. Government spending doesn’t create economy
5. You can balance the budget and “fix” the economy by lower government spending.
6. More efficiency will bring the end of our woes.
7. That the poor and middle class started the “Class Wars”

There are more and I am fully committed to exploring them.

Finally I will leave you with this thought. Many people mistake these elements of the economy.

The three major components are: wealth creation, economic activity, and economic multipliers. I’m hoping that the far right brethren will open their minds and explore these concepts. Understanding the nuances of economics depends on it.

 

[Steve R.]

The reality is much graver, As was stated earlier in this thread, some taxes have the power to reengineer society and in fact it is the most important power the Federal Government has to shape the countries future. Some people think that by engineering the economy, the Government is redistribution wealth and in some cases they are correct.

You have pointed out a significant oversight in my prior post where I wrote that there were two types of taxes. One to collect revenue and the other to transfer wealth. As you have pointed out, a third type exists for purposes of social engineering. Examples, include the use of tax credits for buying energy efficient appliances. (Another reason for the complexity of our tax code.)

Regretfully, I have yet to resolve a logical conundrum that I have concerning the use of taxes for social engineering. Lately, I have been describing the economic policies of the Obama administration as being equivalent to a Soviet style planned economy. At the same time, I don't have an issue with using taxation to "guide" what consumers buy.

Even though I am being internally inconsistent - there is an extremely important economic and tax aspect. Do not use tax credits as a means of promoting social engineering. Tax credits are a form of subsidy, they distort the market and add to the budget deficit. Furthermore, this is part of a "bread and circuses" game being played by politicians to make people believe they are getting "free" money.

My viewpoint, is that taxes be increased on "bad" products to discourage their consumption. For example, the gasoline tax should be increased to encourage the purchase of fuel efficient vehicles. This type of taxation is "clean". The obvious problem with what I am saying is that this form of taxation also constitutes a distortion of the free-market. So be it. But the benefit of an increased tax is the generation of revenue that could be used to reduce the deficit.

Yes, there are issues with what I am advocating. Who defines a "bad" product and how do we know whether the taxes collected will actually be used by the government in a fiscally prudent manner. For now, I don't have answers.

 

[Thales750]

You have pointed out a significant oversight in my prior post where I wrote that there were two types of taxes. One to collect revenue and the other to transfer wealth. As you have pointed out, a third type exists for purposes of social engineering. Examples, include the use of tax credits for buying energy efficient appliances. (Another reason for the complexity of our tax code.)

Regretfully, I have yet to resolve a logical conundrum that I have concerning the use of taxes for social engineering. Lately, I have been describing the economic policies of the Obama administration as being equivalent to a Soviet style planned economy. At the same time, I don't have an issue with using taxation to "guide" what consumers buy.

Even though I am being internally inconsistent - there is an extremely important economic and tax aspect. Do not use tax credits as a means of promoting social engineering. Tax credits are a form of subsidy, they distort the market and add to the budget deficit. Furthermore, this is part of a "bread and circuses" game being played by politicians to make people believe they are getting "free" money.

My viewpoint, is that taxes be increased on "bad" products to discourage their consumption. For example, the gasoline tax should be increased to encourage the purchase of fuel efficient vehicles. This type of taxation is "clean". The obvious problem with what I am saying is that this form of taxation also constitutes a distortion of the free-market. So be it. But the benefit of an increased tax is the generation of revenue that could be used to reduce the deficit.

Yes, there are issues with what I am advocating. Who defines a "bad" product and how do we know whether the taxes collected will actually be used by the government in a fiscally prudent manner. For now, I don't have answers.

Forgive me for not being clear. It was late last night and I was babbling on

I was not making a case for one type of social engineering over another. Although in the absence of “Social Engineering” by the Government, the country's national dialog will be primarily dictated by the other large concentration of wealth; namely the major corporations and the news stations they control.

Certainly Franklin most likely would have spoken against the powerful families in Europe controlling the US Congress, the news media, or the People. And he was the father of American News.


No, what I spoke to was the use of taxes to promote the reinvestment of capital into the US economy. Not in the form of more government employment, but instead more wealth creating activities. Activities like, manufacturing and construction, and intellectual properties, like research and development.


If the Major Companies don’t take advantage of these programs, they will be forced to pay higher taxes which would provide funded government employment or a reduction in the deficit. The country would benefit from any of these activities.

The point being, that if they don’t use capital to create American jobs, than the people of the United States will create jobs anyway.

Many people believe that government intervention and regulations are the biggest obstacle to small business, but as a small business owner I can tell you that it is the control of our major corporations on Wall Street that is by far the biggest impediment.

Take for example building codes. Building codes ensure our homes will be safe to live in, so we can sleep well at night knowing we are protected. Did any of these building codes in any way impede the construction of over a hundred million homes in this country? Not only did it serve to protect family’s safety, it also provided a base line to keep unscrupulous companies from grossly underbidding the market value; which protected legitimate builders.